Location: Memphis, TN | Metro: Memphis, TN-MS-AR HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,140 |
| 1 Bedroom | $1,240 |
| 2 Bedrooms | $1,360 |
| 3 Bedrooms | $1,800 |
| 4 Bedrooms | $2,070 |
| 5 Bedrooms | $2,401 |
| 6 Bedrooms | $2,689 |
| 7 Bedrooms | $2,904 |
| 8 Bedrooms | $3,049 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,240 | $32,919 | 3.77% | A+ |
| 2BR | $1,360 | $76,703 | 1.77% | A+ |
| 3BR | $1,800 | $167,424 | 1.08% | B |
| 4BR | $2,070 | $198,852 | 1.04% | B |
| 5BR | $2,401 | $215,157 | 1.12% | B |
U.S. Census Bureau data (2024)
The potential risks for investing in Section 8 housing in ZIP code 38115 in Memphis, TN, are significant and should be carefully considered before proceeding. Tenant turnover is a major concern, with market rents averaging $1,074 compared to the Federal Market Rent (FMR) of $1,330 for FY 2024. This discrepancy can lead to frequent changes in occupancy, which may result in increased administrative costs and maintenance expenses.
Vacancy exposure is another critical issue, as the Days on Market (DOM) data is currently unavailable. This lack of information makes it challenging to predict how long properties might remain vacant between tenancies. In an area where rental demand is not well understood, the risk of prolonged vacancies increases, potentially leading to financial strain on the landlord.
The deferred-maintenance exposure is also noteworthy. With a typical home value of $164,614 and a median income of $45,636, there is a considerable gap that could indicate difficulties for tenants to afford necessary repairs and upkeep. Landlords must be prepared to cover these costs, especially if they are relying on the steady cash flow provided by Section 8 vouchers.
However, these risks are offset by the high renter share in the area, which stands at 76.6%. High renter density generally translates into a robust demand for rental housing, including Section 8 vouchers. This strong demand can mitigate some of the risks associated with vacancy and turnover, as there is likely to be a consistent pool of qualified tenants seeking housing assistance.
Verdict: Moderate risk for a first-time Section 8 landlord.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.